William Roger and Joan Ann Thorpe - Page 5

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Petitioners invoked the Court's jurisdiction by filing a timely
petition for redetermination.3
On August 13, 1996, petitioners filed an amended return for
1992 in which they reduced the amount of their gross income for
1992 by $68,279. Petitioners contend that their gross income
should be reduced by such amount on the ground that the payment
that petitioner received from IBM is excludable from gross income
under section 104(a)(2).
On April 18, 1997, respondent filed a Motion for Summary
Judgment. In the motion, respondent asserts that the issues
raised in the notice of deficiency have been settled.4
Respondent also asserts that the ITO payment is includable in
petitioners' gross income as a matter of law. Relying primarily
on Commissioner v. Schleier, 515 U.S. 323 (1995), respondent
contends that a payment to a taxpayer may be excluded from gross
income under section 104(a)(2) only when the taxpayer can
establish: (1) The underlying cause of action giving rise to the
payment is based upon tort or tort-type rights and (2) the
payment is received by the taxpayer on account of personal
injuries or sickness. With these elements in mind, respondent
3At the time that the petition was filed, petitioners resided
in Georgetown, Texas.
4No stipulation of settled issues or other such stipulation
has been filed by the parties regarding any of the issues raised
by the notice of deficiency. Accordingly, we regard respondent's
motion as one for partial summary judgment only.